Investigators will view bank details of millions of DWP claimants
The Department for Work and Pensions (DWP) is soon to deploy new powers to inspect the bank account details of people on certain new benefits. Officials will instruct banks to share information about accounts linked with Universal Credit, Employment and Support Allowance, and Pension Credit claims.
These checks aim to ensure that those receiving these benefits are entitled to their payments. Also under the new measures, investigators will have the authority to directly deduct an amount from a person’s bank account if they owe money and refuse to pay up.
In cases where officials want to directly deduct an amount in this way, they will need to request at least three months of bank statements for the account, to confirm they have the cash available. The sum can be taken as a one-off payment or in regular instalments.
Cracking down on benefit fraud
Siobhan Blagbrough, financial crime manager at Ocean Finance, said that the new legislation demonstrates the DWP “is clearly trying to crack down on benefit fraud and stop money falling into the wrong hands”. However, she voiced concerns that innocent people could be mistakenly identified as owing money.
She said: “If someone is genuinely cheating the system then spotting issues faster is a good thing. But these powers are not risk free.
“Innocent people could get swept up in this and suddenly find the money they rely on blocked or taken away. Most people who claim benefits are just trying to get by.
“A missed update about earnings or a small admin mistake should not lead to someone losing the cash they need to pay for food or rent.” The DWP has confirmed that it will not have direct access to people’s bank accounts with these eligibility checks.
A previous policy document from the Government clarifies: “DWP will require banks and other financial institutions to examine their own datasets and provide data to help identify where someone may not be meeting the specific eligibility criteria of a benefit through issuing ‘Eligibility Verification Notices’. DWP will then use the information received, along with other information held on the claimant, to determine whether further inquiry is needed.”
Under the new laws, an independent person will also be appointed to oversee the use of the powers in the bill, to ensure they are effective and used only when necessary.
‘Intrusive’ new powers
However, Ms Blagbrough warned that some may see the new powers as overreaching. She said: “The DWP says they will not be poking through people’s full bank statements or judging how they spend their money.
“Even so this will feel intrusive to many. Someone could have their account flagged even when they have done nothing wrong at all.
“That could mean stressful investigations, payments paused, and debt letters arriving out of the blue. People should not have to fight to prove they are innocent when their only crime was being poor or confused by a complicated system.”
Former Work and Pensions Secretary, Liz Kendall presented the new legislation in January 2025. She said: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money.
“This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence. Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely.
“People need to have confidence the Government is opening all available doors to tackle fraud and eliminate waste, as we continue the most ambitious programme for government in a generation – with a laser-like focus on outcomes which will make the biggest difference to their lives as part of our Plan for Change.”